The research described in this report is the first part of an attempt to study the development of both overall reading ability and verbal encoding efficiency in an effort to see how the two are related. The report proposes a theory of prerequisite or hierarchical relationships and suggests that there may be differences between performance of a skill and learning a skill. It then uses this theory of prerequisite skills as a basis for describing the nature of observed correlation between phonological or articulatory proficiency and reading achievement. It notes that clear evidence exists that poor readers in both elementary school and high school are slower at tasks that involve retrieving a verbal/phonological code in response to a visual stimulus. A longitudinal study of beginning reading in process is described in which children were tested as they completed various portions of a reading curriculum. One preliminary result noted is that oral reading speed during the first year of reading instruction was shown to be predictive of later reading achievement. (MKM)